RIMM Halts Stock, Cuts Guidance, Cites Shortfall In Blackberry Sales, Hockeysticks Rest Of Year Estimates

Tyler Durden's picture

Not good for long-suffering RIMM shareholders:

RIM now expects fully diluted earnings per share
for Q1 to be in the range of $1.30-$1.37, lower than the range of
$1.47-$1.55 previously forecasted by RIM on March 24, 2011. This
shortfall is primarily due to shipment volumes of BlackBerry smartphones
that are now expected to be at the lower end of the range of 13.5-14.5
million forecasted in March and a shift in the expected mix of devices
shipped towards handsets with lower average selling prices
. Gross margin
for the first quarter is expected to be similar to the 41.5% previously
guided. This mix shift is also expected to result in revenue that is
slightly below the range of $5.2-5.6 billion guided on March 24.
Expected shipments of BlackBerry PlayBook in the quarter continue to be
in line with our previous expectations and we have not experienced any
significant supply disruptions in Q1 due to the impact of the Japan
earthquake.

RIM expects to achieve full year fully diluted
earnings per share of approximately $7.50, which reflects anticipated
strong revenue growth in the third and fourth quarters of the fiscal
year driven primarily by the launches of new BlackBerry smartphone
products and prudent cost management.

So plunging earnings in Q1, but hockeystick rest of year. Good luck with that.Also, barely dropping revenues and margins, yet a profound hit on EPS? So... S,G&A (i.e., labor costs) increasing? Can't be: repeat after us - there is no wage inflation, there is no wage inflation, etc.